Market development is an advertising strategy where an organization attempts to sell an existing commodity to a new buyer set. The seller will do so by marketing the product in a different geographical location. In most cases, market development also involves trying to obtain new customers for a product. It is often difficult for organizations to judge whether or not they are marketing their product in the right manner. This is why market development is very important. It helps to ensure that products are marketed in the right way.
There are various strategies used to promote products. One such strategy is going to markets via trade shows. Another strategy is going to markets via traditional marketing methods such as television, radio, and print ads. However, one strategy that is growing rapidly in popularity is what is called the ‘go-to-market strategy.’
A go-to-market strategy is one that is designed specifically to assist businesses in growing their customer base. For instance, when a business goes to the market to promote its goods and services, it may only have limited contact with the new market. Therefore, it is imperative that a market development strategy is put into place that allows a business to build up a strong customer base. The success of the strategy largely depends on how well the customer base is established. However, this is something that can be achieved through a variety of strategies.
Growth in market share is what motivates most companies to develop and implement a market development strategy. For example, if a business is operating in a region where there is plenty of freshwaters but no people at all to use the water, it will not be able to establish a solid customer base. However, if it were to take the same water and market it to individuals living in an area where they are used to using chlorinated water, the business would have a much better chance of growing its customer base. If the expansion was done at the local utility company for the expansion would be slow but more efficient. This type of approach makes for a very effective market development strategy and is typically implemented through acquisitions.
A market development plan should also include strategies for attracting new customers. Some companies take the approach that they simply need to expand their customer base to remain competitive. This is fine; however, a company must determine whether or not it is more cost-effective to acquire new customers that have never purchased from them before than it would be to retain existing customers. Through acquiring new customers through a strategic plan for market development, a company can often increase its revenues by 50% or more by gaining a new customer and expanding its market share.
Another reason for investing in market development strategies is that it is a key to developing a strong customer base. No matter how well a business is performing, it will be hard-pressed to maintain its current customer base if it is not able to entice new ones. One way that this can be achieved is through the process known as branding. A market development strategy can be designed to use branding in order to bring in new customers. The benefit of this strategy is that the company does not spend its money on advertising campaigns; instead, all the marketing dollars are spent on developing a solid brand.
Finally, investing in market development strategies is often seen as a way to avoid a paradigm shift. In a world where technology has been changing the face of businesses for decades, it is important for companies to stay abreast of these changes. Simply putting out a product and hoping that people will buy it is not a strategy for going forward. A smart development strategy knows that it must find a way to make its product or service appeal to both existing customers and potential new customers.
This second step in market development is known as expansion. Extending into new markets is vital to ensuring that profits remain high and that expansion occurs without causing significant financial damage. Strategies are designed to expand a company to help it go of business by generating higher gross profit margins. They take the company deeper into the competitive market, more customers. These customers, in turn, will return again, ensuring that expansion remains a successful business venture. A smart expansion plan never fails because it always sets a framework for future growth.